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Louisiana disqualifies food stamp recipients for overspending

louisiana-food-stamp-card.jpg

Nearly one in five Louisiana residents depends on the Supplemental Nutrition Assistance Program (SNAP) to buy groceries, among the highest percentages in a nation where food stamp rolls continue to rise.
(NOLA.com | The Times-Picayune archive)

Louisiana's social services department said Monday it has stripped food stamps from six people who deliberately overspent their monthly benefits when the electronic service was down in October and was working to disqualify another 25 people.

Details of possible fraud also have been shared with local law enforcement, for district attorneys to decide if they want to prosecute people for knowingly breaching the limits on their monthly food stamp benefits.

The Department of Children and Family Services said it continues to work through the administrative hearing process, targeting 500 people out of 12,000 transactions that overspent available food stamp benefits four months ago during the system crash.

"The investigation and disqualification process is ongoing, and we expect it to result in additional disqualifications," DCFS Secretary Suzy Sonnier said in a statement.

Several Louisiana retailers allowed food stamp recipients to make unlimited purchases on Oct. 12, when the electronic card system was down and balances couldn't be checked. News reports showed carts at some stores piled high with groceries that were abandoned after the system was back online.

About 12,000 insufficient funds transactions were conducted when the contractor, Xerox Corp., had technical problems that shut down the system, though not all transactions are assumed to be intentionally fraudulent.

DCFS said it identified 500 deemed to be the "most egregious transgressors," who took advantage of the computer snafu and tried to spend a combined $315,000 they didn't have in available benefits. The transactions ranged from $300 to $2,000.

Letters were sent, targeting them for disqualification from the program. The department said it has received 113 responses so far.

The responses "have ranged from admitting to committing the fraudulent transactions, to declaring no knowledge of the transactions, and to stating that the retailer told the clients it was 'okay' to perform the transaction because 'the government was shut down,'" Sonnier said.

No taxpayer dollars paid for the improper food stamp purchases because DCFS says it didn't cover the costs of retailers who didn't follow the outlined emergency process for when the electronic system crashes.

The sanctions under federal guidelines allow a one-year suspension of food stamps for a first offense, a two-year suspension for a second offense and a permanent disqualification from the program for a third offense, according to DCFS.

The agency said it provided state and local law enforcement with the information it's gathered about the overspending.

U.S. Sen. David Vitter has complained that state officials weren't aggressively pursuing the overspending as food stamp fraud, and Treasurer John Kennedy recently criticized the department as being too lax in its response to known misuse of food stamps.